Varo Bank review: A mobile-only bank making moves

Our #1 pick for the best neobank bank in the U.S.

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Becca Stanek

By

Becca Stanek

Becca Stanek

Insurance Expert

Becca Stanek has worked as an editor and writer in the personal finance space since 2017. She previously served as the managing editor for investing and savings at LendingTree and as an editor at SmartAsset focused on financial advisor content.

Published October 26, 2021|7 min read

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3.8 / 5

Varo Bank has made headlines in recent years for becoming the first fintech bank to secure a national bank charter from the OCC and approval to offer FDIC insurance on its own banking products. Aside from these industry firsts, the mobile-only bank stands out for having a top-rated mobile app, minimal fees, and no minimums. While Varo's savings account offers a respectable APY that you can increase if you're willing to jump through a few hoops, you may run into fees if you need to make a cash deposit or use an out-of-network ATM, contributing to Varo Bank's overall score of 3.75 out of 5.

Varo Bank

OVERALL

Out of 5. See our Methodology section at the bottom of the page.

3.8

THE GOOD

    Competitive APY (higher if you meet certain requirements)

    No minimums or monthly fees

    Access to over 55,000 Allpoint ATMs

    Top-rated mobile app

    Paycheck up to two days early with direct deposit

THE BAD

    Must meet requirements to earn highest APY

    No physical locations (mobile-only)

    Customer service isn't 24/7

    Limited cash deposit options with possible fees

    Only checking and savings accounts offered (plus a secured credit card)

THE BOTTOM LINE

Varo Bank is a mobile-only bank that stands out for its top-rated mobile app, minimal fees, and ATM network. While its APY is competitive, it's not the top rate out there, and it doesn't have every customer service option you may want, such as chat or physical branches.

Savings APY

See our Methodology section at the bottom of the page for more details.

6.0

Offerings

See our Methodology section at the bottom of the page for more details.

6.0

Mobile App

See our Methodology section at the bottom of the page for more details.

10.0

Fees

See our Methodology section at the bottom of the page for more details.

8.0

Support

See our Methodology section at the bottom of the page for more details.

6.0

The good

Competitive APY

While Varo Bank doesn't blow the competition out of the water with its APY (annual percentage yield), its savings account does offer a solid 0.50% APY. You can boost that to up to 3.00% APY (though only on up to $5,000) if you meet certain requirements. This includes receiving at least $1,000 in direct deposits each month, maintaining a daily savings balance of $5,000 or less for the full calendar month, and keeping your checking and savings account balances at or above $0 for the month. Note that Varo Bank's checking account is not interest-bearing.

No minimum balances or monthly fees

Varo Bank really shines when it comes to its fees. There are no monthly maintenance fees, transfer fees, or foreign transaction fees. Plus, there is no minimum balance requirement you need to meet (though you need to keep your savings account balance at or above $0 if you want to get the highest possible interest rate).

Nationwide ATM network

With Varo Bank, you'll also have access to a network of more than 55,000 Allpoint ATMs, which you can locate in stores like Target, CVS, and Walgreens. You can search for ATM locations using the bank's mobile app. In-network ATMs carry no fee; otherwise, you'll pay a fee of $2.50, plus any fees the ATM operator may charge.

Top-rated mobile app

The category in which Varo Bank rates the best is its mobile app, which is a big upside considering it's a mobile-only bank. The bank scored a 5 out of 5 in this category, boasting a J.D. Power score of 870+ and an App Store score of 4.5+. The app allows you to easily check your accounts and deposit or transfer money between your Varo Bank accounts and to external accounts. You can also sign up to receive notifications any time a deposit or transfer is made or any time your debit card is used. With a Varo Savings account, you can also access automatic savings tools that can make saving money easier.

Get your paychecks sooner

With Varo, you'll also have access to your direct deposit funds up to two days early. This is because Varo deposits your funds into your account as soon as it receives them, as opposed to holding the funds as many banks do.

Varo Bank in the news

The bad

Maximum APY isn’t always easy to get

While Varo Bank boasts that you can earn up to 3.00% APY, you're going to have to jump through a number of hoops to snag it. One of the requirements is maintaining a daily savings balance of $5,000 or less for the full calendar month, which means you can only earn the high APY on a limited amount of funds. Other than that you'll have to receive at least $1,000 in direct deposits each month and make sure your checking and savings balances don't dip below $0.

No physical locations

Although this may not be an issue if you know what you're getting into, Varo Bank is a mobile-only bank, which means it does not have any physical locations. If you like to have the option to visit a bank branch in person, know that won't be possible with Varo.

Customer service isn't 24/7

Additionally, while Varo does have a number of customer service options, it doesn't offer as many ways to get in touch as some banks do, such as by online chat. You can reach out by sending an email or by calling. However, you won't be able to get in touch with someone 24/7, as the call center limits its hours to 8 a.m. to 9 p.m. ET Monday through Friday and 11 a.m. to 7 p.m. Saturday and Sunday, excluding federal holidays.

Limited cash deposit options

Varo Bank also has limitations when it comes to making cash deposits, which you can only do through the Green Dot Network. One way to do this is by depositing cash when you check out at participating retailers, such as Walmart, Kroger, and Kmart. Although Varo won't charge for this, the retailer may charge a fee of up to $4.95. Your only other choice is to buy a Moneypak at a participating Green Dot location, which will cost $5.95. Plus, Varo caps your cash deposits at $1,000 per day, and a maximum of $5,000 per month.

Only two account options

One other thing to keep in mind with Varo Bank is that if you're looking for money market accounts or certificates of deposit (CDs), you're not going to find them at Varo. The mobile-only bank solely offers checking and savings accounts to its customers, though its lineup does also include a secured credit card called Varo Believe.

Reputation

Varo Bank was founded in 2015 in San Francisco. As the first neobank to secure a national bank charter from the OCC and the use of FDIC insurance on its own banking products, Varo Bank definitely has an edge in the neobanking world. It's growing rapidly, too, with Forbes reporting in September 2021 that Varo saw revenue growth of a staggering 23,935% within three years. [1] In a further reflection of its fast growth, Varo Bank was No. 7 on Inc. magazine's 2021 Inc. 5000 list, which ranks the fastest growing private companies in the country. [2]

When it comes to its standing with customers, Varo fares decently as well. It earns 3.87 out of 5 stars from the Better Business Bureau based on reviews from about 400 customers. [3] On Trustpilot, it earned 4.4 out of 5 stars, based on over 2,100 customer reviews. [4]

Still, not everything is rosy for this fintech star. While Varo's revenue is increasing rapidly, Bankers Digest reports that its expenses are growing even faster. "Varo Bank might be one of the only banks in America whose assets have shrunk in 2021, decreasing from $515 million at the end of 2020 to just $248 million on June 30, 2021," Bankers Digest's Christopher L. Williston VI of the Independent Bankers Association of Texas reported, raising the question of what will come next for Varo Bank. [5]

Methodology

To compare Varo with other options and determine the best banks and credit unions of 2021, we collected quantitative data on more than 50 major U.S. financial institutions. Specifically, we looked at savings account APYs, product offerings, fees, mobile app satisfaction, and customer support. We rated each aspect on a scale from 1 to 5, then averaged the five scores into a single rating. Here’s a detailed breakdown of each scoring matrix.

Savings account APY

We rated the highest APY that each bank or credit union offers on a savings account (excluding accounts or rates with a minimum balance requirement greater than $1,000).

Rating

Best Savings APY

1

Less than 0.1%

2

0.10%-0.19%

3

0.20%-0.29%

4

0.30%-0.39%

5

0.40%+

Offerings

We counted how many product lines each institution offers, since many people enjoy the convenience of keeping multiple accounts at the same bank. We included deposit accounts (checking, savings, money market, certificates of deposit), credit cards, loans (personal, student, auto, home equity), mortgages and mortgage refinancing, retirement accounts, and investment accounts as distinct qualifying offerings.

Rating

Offerings

1

1 offering

2

2 offerings

3

3 offerings

4

4 offerings

5

5+ offerings

Mobile app satisfaction

Since mobile apps are increasingly becoming the primary way people manage their bank accounts, we consulted the J.D. Power 2021 U.S. Banking Mobile App Satisfaction Study. For any banks or credit unions that weren’t included in the study, we used mobile app customer ratings from the Google Play store.

Rating

J.D. Power Score

App Store Score

1

Less than 840

Less than 3.0

2

840-849

3.0-3.4

3

850-859

3.5-3.9

4

860-869

4.0-4.4

5

870+

4.5+

Fees

We consulted every bank’s fee schedule and terms and conditions to search for any of the following: monthly maintenance fee, overdraft fee, insufficient funds fee, debit card replacement fee, account closure fee, and stop payment order fee.

Rating

Qualifying Fees

1

4+ fees

2

3 fees

3

2 fees

4

1 fee

5

0 fees

Customer support

Since different people prefer different support options at different times, we counted how many customer support channels each bank offers, including telephone, email, online chat, mobile app, online forums, online learning center, and physical branches.

Rating

Support Channels

1

1 option

2

2 options

3

3 options

4

4 options

5

5+ options